3.12 Absorption and activity based costing
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Additional information |
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The use of absorption costing to calculate the total cost of a product. |
The use of absorption costing will include understanding relevant terminology: allocation, apportionment, absorption, under-absorption, over-absorption. Calculations are for:
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The use of activity based costing (ABC) to calculate the total cost of a product. |
The use of activity based costing will include understanding relevant terminology: cost pool, cost driver, attribution. Calculations are for:
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Use of absorption and ABC to calculate the selling price of a product. |
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The benefits and limitations of absorption, ABC and marginal costing. |
The benefits and limitations could include the comparison of inventory valuations and profit calculations made using absorption, ABC and marginal costing. |